Multi Domain Hosting is where you can host more than one domain under one hosting account.

Eg  if you own abc.com, lmn.com and xyz.com and you want a cost effective solution to host all of them then multi domain hosting is the answer.

Here you get one control panel to manage all your domains. You may get a cPanel control panel for your main domain and from there you can create hosting accounts for other domains too.

When you create hosting accounts for other domains than a subfolder is created under your main domain and it has everything just like in main domain. You can create email ids, databases for those other domains from the main cPanel control panel itself.

Multi Domain Hosting is good if you want to fully utilize the web hosting space as provided to you by your hosting company as the aame space is shared between all the domains hosted under that main account.

However its advisable to not to purcahse Multi domain web hosting if you want to provide individual control panels to each of the domain as you get only one control panel to mange all the domains in  multi domain hosting.

If you are a web designer and don't want to provide control panel to your clients than multi domain hosting is the ultimate choice as it cuts your hosting cost significantly.